Uber's old tricks

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/21270992.100570/aHR0cHM6Ly90d2l0dGVyLmNvbS90ZWNobm9sb2d5/582c8673566a94262a8b49bdBf92b63e1 [Get the newsletter]( Hi all, it's Eric. Everything old is new again. On Thursday, it felt like we were back in the world of Uber 1.0 when Travis Kalanick still ran the show. It was a dramatic day for ride-hailing, starting in the morning California time, when Lyft [announced]( that it would be suspending service in the state ahead of a court deadline mandating that it start classify its workers as employees. Right now Lyft's drivers in California are independent contractors. It seemed likely that Uber would also stop rides when the deadline expired at midnight that night. But hours before the companies seemed poised to shut down in the state, the California Court of Appeals granted Uber and Lyft a stay of execution. The court ruled that the companies could continue with their current business models while they challenged a judge’s order to comply with the state labor law. The companies have a hearing scheduled for Oct. 13. Now, the next major step in the saga may be the November election, when California's voters will get to decide whether Uber and Lyft drivers are really employees. A ballot initiative backed by both companies would give drivers some portable benefits but would deny them employee status. If Uber and Lyft lose their ballot initiative it’s not clear what leaving California would get them. If they win, they’ll be happy to keep operating in their home state. The threats to pull out of the state were reminiscent of an earlier era at Uber, when the company warred with New York Mayor Bill de Blasio in 2015, or when Uber and Lyft left Austin, Texas over a separate regulatory scuffle in 2016. Those fights also seemed to have the same strategic purpose—to galvanize public support for ride-hailing's legal battles. The possibility that Uber might halt its business in California felt like we were back in the days of Uber as an embattled, bellicose startup. Oddly, that wasn't the only startling reminder of the company's past this week. Also on Thursday, the U.S. Attorney in San Francisco charged former Uber Chief Security Officer Joe Sullivan with obstructing justice and deliberately concealing a crime. Sullivan allegedly spearheaded Uber’s decision not to disclose a data breach that exposed license numbers of some 600,000 Uber drivers. The charges would make Sullivan, a former assistant United States attorney and the former chief security officer at Facebook Inc., the second high-profile executive charged with a crime tracing to Kalanick-era Uber. The other is Anthony Levandowski, once the head of Uber’s self-driving car division, who was sentenced this month to 18 months in prison for stealing trade secrets from his former employer Alphabet Inc. In both cases, Kalanick played a key supporting role in the surrounding drama. In Levandowksi’s case, it was Kalanick who aggressively recruited Levandowski to Uber and spearheaded the purchase of his tiny autonomous trucking startup called Otto. In Sullivan’s case, the charging documents reveal that Sullivan texted and called Kalanick early one morning soon after Sullivan learned about the stolen driver’s license numbers. At 1:28 a.m. Sullivan texted Kalanick, "I have something sensitive I'd like to update you on if you have a minute.” Sullivan is accused of concealing from the Federal Trade Commission the data breach and trying to frame it improperly as bug bounty program. After Dara Khosrowshahi took over as chief executive officer, and Tony West as chief legal officer, the pair publicly revealed the hack and fired Sullivan. The charging document alleges that Sullivan attempted to conceal key details of the hack from his new boss. In a press conference announcing the accusations against Sullivan, U.S. Attorney for the Northern District of California David Anderson said, "Silicon Valley companies have changed and will change the world. It is perfectly okay for young companies to move fast and break things, but they cannot break the law. Silicon Valley is not the Wild West." —[Eric Newcomer](mailto:enewcomer@bloomberg.net) If you read one thing Reddit took stock of its [hate speech purge](. The company said it banned 7,000 subreddits and saw an 18% drop in hateful speech. The link sharing website had long been resistant to cracking down on its controversial r/The_Donald subreddit but finally banned the group after the Black Lives Matter protests and [after co-founder Alexis Ohanian stepped off the board of directors](. Sponsored Content by CrowdStrike The world’s most trusted organizations partner with [Crowdstrike]( to stop data breaches. We stop. So you can go. [Crowdstrike]( secures the data and infrastructure that keeps the world running. That’s why we’re a trusted partner of the world’s most important organizations. We stop. So you can go.  And here’s what you need to know in global technology news  Mark Zuckerberg answers more antitrust questions. This time it was [in private]( with the Federal Trade Commission. Amazon has paused hiring in its Alexa department, as the unit [feels pressure to make money]( from its voice-activated assistant, people familiar with the company have said. Amazon denies the claims and says hiring is strong. Publishers ask Apple for the Amazon discount. The retail giant [pays Apple only 15%]( instead of the standard 30%.  Like Fully Charged? | [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.  You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022